Originally Published 2017-05-08 06:37:06 Published on May 08, 2017
OBOR: For India it's a road to subjugation

The end-goal of OBOR is to establish Chinese mastery over oceans and connectivity routes across Asia and between Asia and Europe. It is premised on an American vacation of strategic space in the coming 20 years

As the Chinese prepare to host the Belt and Road Initiative Summit, focused on the project also known as One Belt-One Road (OBOR), there has been a flurry of commentary in India on how New Delhi should respond. India has made it clear it will not be sending its Prime Minister to the summit, and has little desire to pay court to a Chinese imperial construct. Indian objections have repeatedly mentioned the fact that the China-Pakistan Economic Corridor (CPEC), a key segment of OBOR, passes through Gilgit-Baltistan and this makes any Indian acceptance of the project impossible.

Legally, Gilgit-Baltisan is Indian territory: It was part of the undivided kingdom of Jammu & Kashmir, which acceded to India in October 1947. At the very least, it is internationally disputed territory. It is certainly not Pakistani property — though it has been under Pakistani state and Army occupation for 70 years — and cannot simply be used for a bilateral project without consultation with or reference to India.

Yet, is India’s problem with OBOR limited to CPEC? What if Beijing announces that it is hiving off CPEC as a separate, two-country initiative, and delinking its formal structure for and investment in CPEC from the overall OBOR project? Would that make the rest of OBOR acceptable to India? Is India okay with OBOR minus CPEC? Clearly some in New Delhi are making that argument but the very idea is ridiculous. The thinking in the Government is not just that CPEC is unacceptable, it is that the very foundational principles of OBOR offer a strategic challenge to India.

If India joins, facilitates and invests in OBOR, if India does not concentrate on implementing its own connectivity and infrastructure projects — to give it space for manoeuvre and strengthen its bargaining position vis-à-vis this ambitious project — it will find itself locked out of a Chinese imperial framework in the 2030s. It will become Asia’s permanent second-class power, a lesser priority in the eyes of even its south Asian neighbours, let alone the wider expanse of Asia and of European and Indian Ocean partner countries.

Any Government that accepts this defeatist notion and does not act to redress it, will weaken Indian interests and make a laughing stock of its legacy. It is delusional to expect this is what the Narendra Modi Government wants to do, and that it is merely waiting for some symbolic concession and superficial language from the Chinese, such as removing CPEC from OBOR documents and giving it a different and separate label.

OBOR needs to be understood for what it is — a political project. Its economic viability is secondary to the Chinese and should be disregarded by Indian analysts as well in assessing its future. That is not what the project is meant for. Neither is China eagerly waiting for India to sign on to OBOR and/or CPEC because the Indian market will make OBOR viable. China knows India will never sign on since the political price it will have to pay — accepting Chinese suzerainty — a non-starter in this country.

What is the purpose of OBOR for China? It is facile to believe the Chinese are seeking to build infrastructure in other countries only because they themselves have excess infrastructure capacities and are looking for ancillary manufacturing locations (as wages in China rise) and new markets for their products outside China. While there may be a sliver of truth to this, nobody makes such ambitious investment decisions at a time when global demand is in a slump.

CPEC, for example, is premised on power tariffs that Pakistani citizens are unlikely to find affordable and Pakistani utilities are unlikely to have the capacity to collect. It is a debt trap waiting to happen. Take the example of Sri Lanka. Whether is the Hambantota port or certain power projects, the country has been saddled with white elephants. OBOR is resulting in little Chinese investment in developing countries — the majority of Chinese overseas direct investment still goes to the developed world — but it is leading to loans being offered to countries across Asia and the Indian Ocean.

These loans are a disbursement from a Chinese lending agency to a Chinese company, with very little infusion to the host economy in terms of jobs, income distribution and prosperity. Some money is used to bribe local elites and Governments and create distortions in the political structure in those countries.

Far from being a force for stability, One-Belt-One-Road is disturbing domestic and regional political balance and weakening democratic institutions in the countries it enters. It is already producing a series of client states. Their very existence is dependent on furthering Chinese interests.

At some stage, there will be a blowback. India, as a key country in the region, will not be unaffected. Already the Indian endeavour to build a port in Trincomalee (on viable and equitable terms that benefit both India and Sri Lanka) is seeing protests by activists. These activists have little against India per se but have been disturbed by the experience with China in Hambantota and elsewhere. Chinese subterfuge is resulting in a wider anti-foreign investment sentiment, which is hurting India as well.

The end-goal of OBOR is to establish Chinese mastery over the oceans and the connectivity routes across Asia and between Asia and Europe. It is premised on an American vacation of strategic space in the coming 20 years and the rise of China to unchallenged superpower status. For China, more than commercial returns from individual projects, this is the motivation behind One-Belt- One-Road. It is the political equivalent of predatory pricing and capital dumping.

India has to respond with its own projects, nimble partnerships with friendly countries and capacity building of its strategic and maritime assets. The idea is not to duplicate OBOR, for that would be both unnecessary and impracticable, but to establish that OBOR is not the only game in town. That is the benchmark the Modi Government will be judged on, not more and not less.

This commentary originally appeared in Daily Pioneer.

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.